UK May Slow Minimum Wage Rise for Young Workers Amid Soaring Youth Unemployment
February 18, 2026
UK ministers are considering delaying the planned increase in minimum wage for younger workers aged 18 to 20. This comes as youth unemployment among 18- to 24-year-olds hits a five-year high. The current minimum wage for the younger group is £10 an hour, while those over 21 earn at least £12.21. Labour promised to equalise these rates by the next election, but government sources say the rise could be slower now. Experts warn youth unemployment is hitting historic highs. Alan Milburn, former minister and chair of the government's young people and work review, called this situation an “existential” risk that could leave a generation “on the scrapheap.” He said, “We’re seeing something dramatic changing in the labour markets.” From April, the cost of employing someone over 21 will have increased by 15%, but for those aged 18 to 20, the cost rises by 26%. This large increase can make employers hesitate to hire younger workers. A Treasury source said slowing wage equalisation is “all but certain,” but the Low Pay Commission will make the final decision. Business leaders support slowing the increase. Kate Shoesmith of the British Chambers of Commerce said 37% of firms fear the wage rise will stop them from hiring young workers. Alex Hall-Chen from the Institute of Directors stated that higher youth wages have already hurt young job seekers. Meanwhile, GMB Union’s Andy Prendergast called the idea that equal wages will kill jobs “nonsense.” Chancellor Rachel Reeves avoided confirming any delay but mentioned incentives like apprenticeships and no national insurance for young workers. A government spokesperson confirmed plans to raise wages to fairly reward low-paid workers. The debate continues as ministers weigh the impact on businesses and jobs before the next national election.
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Tags:
Minimum wage
Youth unemployment
Government policy
Labour Party
Low Pay Commission
Employment
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